Bitcoin (BTC) posted a thunderous 9.5% gain in the BTC/USDT pair on Wednesday to close at a six-month high of $24,320.
Short liquidations shot up by USD 155 million as the benchmark cryptocurrency broke every resistance line in the order book and crossed safely past the 23k-24k channel.
BTC/USDT added more gains this morning, with the pair reaching USD 24,900 before retreating to USD 24,600.
So, what caused this strong rally?
Surprisingly solid US retail sales – up 3% in January against a forecast of 1.8% – plus impressive industrial and manufacturing output sent a jolt through risk markets.
Tech stocks were seen higher, encouraged by the very real possibility that we will avoid a recession.
UK stocks must certainly take some credit; The FTSE 100 index pushed to a new all-time high after breaking above 8,000 for the first time ever.
Bitcoin (BTC) shoots to six-month high – Source: currency.com
Still, BTC, yes the crypto markets in general, have clearly outperformed the stock market in the last couple of days, with the exception of stocks next to crypto.
Coinbase rose over 17%, Marathon Digital over 18% and Argo Blockchain on the London Stock Exchange is up a whopping 20%.
Worth noting is how this rally came just as US and UK regulators have been drumming up a widespread crackdown on everything from stablecoins and staking to bitcoin ATMs.
Maybe this is the bulls saying: We see you, regulators, and we don’t care.
Bitcoin Ordinals have also pushed network activity – and congestion – higher, with the number of NFTs minted on the bitcoin blockchain exceeding 100,000.
Ethereum shot 7.5% higher yesterday and added another 0.5% this morning to touch US$1,712.
The pair was sent back to USD 1,680 as buyers pulled out, but not before taking some USD 42 million in short liquidations.
Binance’s ETH/USDT order book shows resistance levels at US$1,700, US$1,750 and US$1,800. In other words, ether is finding it more difficult than bitcoin to create a sustained rally, as evidenced by the bearish ETH/BTC pair.
In the altcoin space
Bitcoin’s rally was broadly shared in the altcoin space, particularly with Cardano (ADA), Solana (SOL) and Avalanche (AVAX) all rising close to 10% overnight.
However, Ethereum scaling solution Optimism (OP) took the top spot, adding nearly 20% to bring its market cap above $665 million.
Only Polkadot (DOT) and Binance’s BNB coin remain in the red week after week, the latter due to the regulatory crackdown of its BUSD stablecoin.
The global cryptocurrency market cap is currently $1.11 billion, having added over 8% overnight.
In the decentralized finance (DeFi) space, around 6% in total value locked (TVL) across all protocols was added overnight, bringing TVL above $50 for the first time since before the FTX collapse in early November.
